One in 10 low-income households are facing a challenging situation as the winter approaches, with a recent survey revealing that they have no energy credit to rely on during the colder months. The study, conducted by Uswitch, found that 11% of homes with an annual income below £20,000 already owe money to their energy supplier as winter draws near, with an average debt of £163.
Traditionally, the energy direct debit system operates by consumers accumulating credit in the cheaper summer months to offset higher energy usage in winter. Despite this method, the survey highlighted a concerning trend where over five million low-income households lack any energy credit just as they head into the costlier winter period.
On a more positive note, the national figures depict a slightly better scenario, with only 8% of households – equivalent to 2.4 million homes – starting winter in debt on their energy accounts, a reduction from over 11% last year. The average energy debt per household has also decreased by 17%, from £216 to £179, although the average account balance is at its lowest in three years, at £128.
According to the survey, almost three-fifths of UK households (59%) find themselves in credit, with an average surplus of £220. However, there has been a slight dip from last autumn’s average of £236. Overall, nine million households have no energy credit as they transition into the winter season, indicating a marginal decline compared to previous years.
Despite the overall improvements, a worrying trend persists, with 32% of households in debt reporting higher arrears compared to the previous year and 12% transitioning from credit to debt. Additionally, two-fifths of households (43%) express increased concern about their ability to pay their energy bills this year compared to last year.
In light of these findings, Uswitch is urging the government to consider additional measures to support vulnerable consumers during the upcoming winter months. Richard Neudegg, the director of regulation at Uswitch, emphasised the importance of maintaining a two-month energy credit cushion and advised households struggling with energy bills to contact their suppliers promptly.
The survey, commissioned by Opinium, involved 2,000 UK energy bill-payers and was conducted between October 1st-7th. As winter looms closer, the findings serve as a reminder of the challenges faced by low-income households as they navigate through the colder and more expensive season.